Netflix Throws in the Towel on Warner Bid, But It’s Not Over for Paramount!

In a surprising turn of events in the saga of Warner Bros’ acquisition, Netflix has officially withdrawn on Thursday, February 27, choosing not to match an enhanced bid by Paramount. This decision concludes a six-month fierce battle over the iconic Hollywood studio but does not secure a win for Paramount.

“We have always been disciplined, and with the price needed to match the latest offer from Paramount Skydance, the deal no longer makes financial sense,” stated Netflix Co-CEOs Ted Sarandos and Greg Peters in a joint statement to Deadline. “This transaction was always a ‘nice to have’ at the right price, not a ‘must-have’ at any price.”

News of the withdrawal promptly boosted Netflix shares by 10%, as investors applauded the company’s financial caution. Paramount had increased its offer to $31 per share (up from an initial $30) and strengthened its financing guarantees, prompting Warner Bros Discovery to declare this bid “superior” to the $82.7 billion agreement signed with Netflix in December.

“This Deal is Not Yet Sealed”

However, just two hours following Netflix’s announcement, California Attorney General Rob Bonta tempered the prevailing optimism. “The Paramount/Warner Bros deal is not yet sealed,” he commented, according to Deadline. “These two Hollywood titans have not passed regulatory scrutiny. The California Department of Justice is conducting an open investigation, and we intend to be thorough in our review.”

This warning comes a week after California launched an antitrust investigation into the merger, a significant move in a state where the entertainment industry is a major economic force. “The film and entertainment industry is not only historically significant to our state, it’s also a critical sector that supports California’s economy and impacts the daily lives of Americans,” Rob Bonta stated on February 20. “The proposed transactions for Warner Brothers must undergo a complete and robust review, and California is watching closely.”

A Politically Charged Case

The issue also takes on a political dimension. Democratic Senator Elizabeth Warren had labeled a Paramount-Warner merger an “antitrust disaster,” while 11 Republican attorneys general had written to Justice Minister Pam Bondi to express their “concerns about the proposed merger likely resulting in excessive market concentration.”

The case still needs to secure approval from Warner Bros Discovery shareholders and the green light from U.S. and international regulators. Thus, the story is far from over.

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